Arbitrage in Austin, TX ?

Question

With the STR operating license guidelines, one has to own the property in order to rent it out for less than 30 days. Does anyone know a way around this?

I imagine people or doing it anyways and just gambling on not getting caught.. what are your thoughts?

V.G Jason · Answer

Those were rules were created so you don't game them on this.

Aaron Gordy · Answer

The fines are quite steep... Think twice on this strategy.

Jake Faulkner · Answer

Got it - so a single landlord of a residential property would be a harder sell I imagine?

Ryan Kelly · Answer

Yes, you can negotiate a lease with a commercial multifamily operator to run short-term rentals, but won't necessarily be easy. I have a client who runs a corporate housing company by signing long-term agreements with some A-class operators for a portion of units and then offers short-term corporate housing in the units. Airbnb has also worked on some new agreements with multifamily operators to allow a portion of tenants to have the right to short-term rental their units with the property management's permission. Very new update so will be interesting to see how many new Airbnb units come online with this arrangement.

Jake Faulkner · Answer

Interesting. Do you think there is a way to negotiate a commercial lease with a residential landlord since arbitrage would be operating as a business? Although I understand the property itself is not technically a "commercial building".

Thoughts @Ryan Kelly ?

Ryan Kelly · Answer

@Jake Faulkner apartments can get an STR-3 license, which is for commercial property, and can offer a certain percentage of units as STRs. That’s not the case for non-owner occupied residential property.

Jake Faulkner · Answer

Thanks for the input @Aaron Gordy & @V.G Jason - I imagine people are still getting away with it because there are apartments listed on AirBnB over on the east side... might not be something worth exploring though.

Arbitrage in Austin, TX ?

Most Popular Reply